I am not trying to pretend I understand what the hell went on between the Wilpons and the Maddoffs, or between Bernie and anyone for that matter. Just that since the announcement that the Wilpons are selling a portion of the team there has been a lot of confusion as to how the Wilpons lost money and more precisely how much.
There are tons of different reports out there even before all this “limited partner” stuff came about today. I will simply work with the most popular figures as an attempt to demonstrate the most likely scenario. Again I have no idea how accurate any of this is, and in fact I assume it’s all wrong. This is just how I understand it as happening. Feel free to correct me via the comments.
Most sources have said the Wilpons initial investment was about $523 million dollars. This most likely wasn’t invested all at once and was probably added in year by year as they kept seeing unreal (literally) results.
A lot of reports keep siting as well that the Wilpons “profited about $48 million dollars” and that they “didn’t lose any money in the Madoff scandal” I guess technically this can be called true but you have to dig a little deeper to see just how deep the Wilpons most likely got cut.
Again I am using these figures as a basis of demonstration to help people wrap their heads around what might have happened.
So lets assume that Old Freddy Boy went to Bernie’s office and cut him a check for $523 million dollars.
Over the next 20 or so years (it’s been widely reported that Fred and Madoff knew each other for years) the Wilpons continued to cash out percentages that they saw as profits. So if Madoff told the Wilpons they saw a 10% return on their investment the Wilpons might cash out $50 mill and keep their principle in the Madoff fund.
Over the course of the 20 year time period the Mets are rumored to have “withdrawn” about $571 million (again no idea if true – just a nice round easy number so we work with it).
Then the day comes when Madoff is exposed and many many people are left in ruins, a catastrophe we wont full know until years and years from now.
The Wilpons and the Mets continue to state up and down that they did not lose money in the Madoff scandal and that the operations will not be harmed by it (today we find that to be a flat out lie).
A trustee is appointed on behalf of the Madoff victims to try to regain some of the ill-gotten-gains in hopes of getting some of their money back. Close to 200 lawsuits have been filed with a reported ceiling around 50 BILLION dollars. That’s no typo – billion. One woman was slapped with a $16 billion dollar suit. Wow.
The trustee has been very aggressive, and has been aggressive towards the Wilpons trying to regain some of the profits.
Many people have wondered how if the Mets only “profited” $48 million how this would really harm people of the Wilpons zip code. That’s where it gets murky.
The Wilpons initially invested around $523 million, and have since slowly withdrawn $571 million and it’s assumed they didn’t cash out all of it, leaving in at least their initial investment of around $500 million (other reports have said around $700 million)
This is where it gets painful for the Mets. Yes it’s true that the Wilpons technically didn’t lose any money in the scandal having recouped their initial “investment.” And yes it’s true the Wilpons technically “profited” that $48 million they “withdrew” over and above their initial investment. Problem is that the Mets thought that aside from the $571 they had withdrawn, that they have another $500+ million in the Bernie Bank.
At the very least this $500+ was used in their considerations for the new CitiField as well as other ventures. More likely it was used as an asset or collateral to secure different loans etc.
Well we all know that $500+ million in the Madoff account is gone.
So despite the fact that most feel the Wilpons have nothing to bitch about, in their eyes they have lost about $500+ million dollars that they thought they had. More importantly they instantaneously lost $500 million they were probably counting on and without it certain margins got REAL REAL tight.
Sure the Wilpons are loaded, and I agree that the Mets and SNY probably make a good chunk of cash, but when your talking about these heights, that might not be enough liquid.
Throw into the mix this trustee who shoots for the jugular with all his other suits and the Wilpons might be staring down the barrel of a very scary gun.
So to wrap it up:
$523 million – initial investment
$571 million – alleged profits made over the course of 20 years
$571 million – amount reportedly “withdrawn” over years by Wilpons
$48 million – amount Wilpons said to “profit” assuming you only look at the $571 they ended up with
$500-$700 million assumed to have still been in Bernie Madoff posession at the time of schemes collapse, thus lost to the Wilpons
So do the Wilpons want to sell the team entirely? No probably not. And they will proclaim up and down that there is no chance of that happening. Well just a year ago they steadfast refused that they would bring on partners and that they were financially fine. I think it’s largely out of their hands right now and it’ll all depend on what this trustee settles at.
Once again I want to say none of this is based on fact. I have done zero research myself on this. It’s just bringing together numbers and thoughts I have heard/read over and over since the scandal broke. I hope it helps wrap your head around what’s going on.